Exelon asks FERC to break PJM's capacity auction, which cleared at the $325 cap and committed $16.4 billion
The utility carrying the AI boom's load growth asked FERC on November 4 to break PJM's three-year capacity auction. The filing landed the same day the midterms knocked the generator trade down double digits.
Vincent Jiang · 3 min read
The charge came the day after the sweep
On November 4, Exelon, the utility holding company whose utilities buy and deliver power across PJM's 13-state territory, filed a complaint at the Federal Energy Regulatory Commission arguing that PJM's three-year-forward Base Residual Auction "no longer is just and reasonable" 2. The filing says the capacity market is "producing high prices without stimulating necessary investment" while customers already face rising bills 1.
Exelon0.00% — Exelon, unchanged as of its last quote wants FERC to order a prompt auction held two months before the delivery year instead, and cites an expert exhibit by Emma Nicholson of Charles River Associates showing a positive correlation between shorter forward periods and smaller changes in peak-load forecasts between the auction and delivery 2.
Prices at the cap, sized on a forecast that has since shrunk
The prices Exelon is attacking are real. PJM's July auction for the 2028/29 delivery year cleared at its $325 per megawatt-day price cap and committed $16.4 billion 3.
To cover the resulting 6,831-megawatt shortfall, PJM planned a backstop purchase capped at $555 per megawatt-day, about $1.4 billion a year and roughly $21 billion over 15 years 3. But PJM's own independent market monitor counted 4,017 megawatts of data center load canceled or delayed by September 21, 42% of the data center growth PJM had forecast for those delivery years 3. Strike it and the gap halves to 3,055 megawatts 3.
Remove the ghost load and PJM's capacity gap is cut in half
The shortfall was sized for load that later vanished
- Estimate
Data
| Value | |
|---|---|
| PJM forecast gap | 6,831 MW |
| After canceled load | 3,055 MW |
| Half-growth test (estimate) | 2,374.7 MW |
The complication: the regulator already called it a mess
Exelon is not the first to doubt the machinery. On September 29 FERC suspended PJM's backstop plan until February 28, 2027, sent cost allocation to a hearing with initial briefs due November 13, and opened a docket finding PJM's existing tariff "may be unjust and unreasonable" 34. Chairman Laura Swett wrote that the commission "will not be forced into accepting a deeply flawed, eleventh-hour procurement mechanism with billion-dollar implications for consumers" 4.
Both camps own the same trade
The generators sit on the winning side of the prices Exelon attacks. Vistra+4.53% — Vistra, up 4.53 percent today closed down 14% at $120.29 on November 4, a 52-week low, after Texas elected a governor who campaigned on pausing new data centers, and Constellation fell 8% that morning 5.
Exelon reads like the countertrade. Last week it beat on earnings, $0.87 adjusted EPS against a $0.79 estimate, and holds a $41.7 billion capital plan built in part on about 11 gigawatts of high-probability data center load at its utilities 6. The utility selling data center growth is now the loudest critic of the capacity prices that data center demand drives.
What decides it
FERC must answer a complaint that lands on a record it has already doubted. Briefs in the cost-allocation hearing are due November 13, PJM's next auction, for the 2029/30 delivery year, is set for December, and the Department of Energy has pushed PJM toward updated load forecasts 34.
If the prompt auction goes ahead, forward capacity revenue for the region's generators reprices. If it stalls, Exelon keeps filing and customers keep paying at the cap.
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